CityFibre appeals decision of Ofcom review

06 July 2016 |

CityFibre has lodged an appeal with the UK Competition Appeal Tribunal in relation to regulations set out by Ofcom in its market review into dark fibre

CityFibre, a designer and operator of fibre optic infrastructure based in the United Kingdom announced today that it has lodged an appeal with the UK Competition Appeal Tribunal in relation to regulations set out by Ofcom in its 2016 Business Connectivity Market Review into Dark Fibre.

The outcome of Ofcom’s recent review gave Openreach’s (BT) competitors ‘physical access” to its fibre optic cables - allowing them to ‘take direct control of the connection’ has angered Cityfibre.

Ofcom is suggesting that the Dark Fibre optic cables would not be lit using BT’s electronic equipment - they would be lit by a competitor installing their own equipment at either end of the optical fibre. Ofcom has come to the conclusion that this solution would deliver more market competition and speed-up the roll-out of new broadband services.

Ofcom, however, was concerned that BT would charge excessively for dark fibre, so they proposed that the dark fibre remedy should be subject to a charge control (i.e. keep its price low). But by offering Dark Fibre on the cheap the regulator could risk harming BT’s rivals in the same market.

Ofcom’s decision came as a surprise to the fibre optic infrastructure builders, particularly since a similar review conducted by the regulator three years ago, had described the same solution as carrying “significant risks of worse outcomes, both for consumers and for effective competition, including adding costs and encouraging inefficient entry.”a

However Cityfibre doesn’t welcome the opportunity to gain access to BT’s dark fibr network through Ofcom’s regulated price approach. Cityfibre’s fear is that the approach will threaten their own dark fibrmarket and they already have the support of other infrastructure developers.

In its appeal Cityfibre says that the policy is ‘ridiculous’ and would entrench BT’s position as a “single, unassailable wholesale infrastructure provider.”

Mark Collins, Director of Strategy and Public Affairs at CityFibre, said: “As a major investor in the UK telecom infrastructure market, working to transform digital connectivity across the country, we need to ensure that CityFibre and other fibre optic infrastructure builders can invest against the background of a fair and balanced regulatory regime. We believe Ofcom is implementing poor and inconsistent regulation, and we have a duty to robustly contest their decisions and policies in the normal course of business – especially where they conflict with stimulating long-term investment in the critical digital infrastructure which the UK so badly needs.”